If you want to achieve financial independence, renting out a portion of your home can be a good idea. Fortunately, doing so requires very little money on your part. In order to rent out a space, it needs to meet rental standards and codes. If your unit fails to meet standards, you can get yourself into a lot of trouble when it comes to your insurance. Therefore, if you have a finished basement or garage, you’re in good shape.
While renting out part of your home can help you generate a passive income, it can have its drawbacks. Here, we’ve rounded up some pros and cons of renting out part of your home.
Homeowners have plenty of expenditures to deal with. From property taxes and mortgages, to insurance premiums and maintenance costs, homeowners need money to pay for all these things. Renting a part of your home can bring in monthly income to cover most homeownership costs or make them easier to manage.
It’s no secret that maintaining your property is a time-consuming process. It’s especially true if you have to do it all yourself. However, if you rent out a portion of your home, you can make your tenant responsible for certain maintenance tasks. This can be included in your rental contract.
For example, if it snows you can make them responsible for clearing off their side of the driveway.
Living alone can be scary for some people. Therefore, having someone else around might relieve your stress and give you a peace of mind.
As mentioned above, renting your home can be an excellent way to generate income. However, it can have its drawbacks.
Note that you’re not allowed to use the space you’ve given to your tenant. That means if you want to rent out a finished basement, you lose that additional storage and living space. The same goes for other areas like a finished garage or attic.
You may end up missing the extra space in the garage or basement to keep your belongings and tools. It’s important that you make sure you have no trouble parting with the space before you put up an ad for tenants.
If you’re a private person, sharing your home with a tenant could make you uncomfortable. Your tenant may end up being intrusive and not respecting your personal space. That’s why it’s essential to make this decision only when you’re ready to share your home with another person.
If your income is tight and you have space in the home that you can share, it’s reason enough to rent it out. However, before you seal the deal, you must consider all the drawbacks involved. You also need to verify if you’re even allowed to rent in your neighborhood or not.
This is a big decision and not one to be taken lightly; therefore, weigh all the pros and cons.